Firms closely tailing those two leaders, classified by Gartner as "visionaries," include CenturyLink, Google, VMware and IBM/SoftLayer. Among those named by Gartner as "niche" providers were Rackspace, Joyent, Virtustream, Interroute, CSC, Dimension Data, Fujitsu, NTT Communications and Verizon.

Despite grouping AWS and Azure as the only leaders, Gartner singled out Amazon as the superior cloud provider. "AWS has a diverse customer base and the broadest range of use cases, including enterprise and mission-critical applications," the report said. "It is the overwhelming market share leader, with over 10 times more cloud IaaS compute capacity in use than the aggregate total of the other 14 providers in this Magic Quadrant."

The report said AWS still maintains a multiyear competitive advantage over both Microsoft and Google. A Microsoft spokeswoman in a statement said Azure still offers more than twice as much cloud IaaS compute capacity in use as the aggregate total of the remaining providers in this Magic Quadrant other than AWS. Microsoft officials also frequently point out that it has more datacenters around the world than AWS and Google combined with 19.

"This speaks strongly to Gartner's belief that the IaaS market is quickly consolidating around a small number of leading vendors," she said. "Microsoft is seeing significant usage and growth for Azure with more than 90,000 new Azure customer subscriptions every month, more than 50 trillion objects now stored in the Azure storage system and 425 million users stored in Azure Active Directory. In addition to strong use of Infrastructure-as-a-Service capabilities, we're also seeing over 60 percent of Azure customers using at least one higher level service."

The report opined that "Amazon has the richest array of IaaS features and PaaS-like capabilities. It continues to rapidly expand its service offerings and offer higher-level solutions." Microsoft argued it's the only vendor identified as a leader in both Gartner's IaaS and PaaS categories. "We also are differentiated in our ability to enable customers to use these capabilities together in a seamless fashion," she said. "For example, Azure Resource Manager enables a single coherent application model for IaaS and PaaS services and the Azure Preview Portal blends IaaS and PaaS seamlessly so that customers no longer have to work in multiple, disparate environments."

Gartner also pointed to reliability problems that have plagued Azure including numerous outages, though it notes substantial improvements over the past year. "We are committed to applying learnings when incidents occur to prevent recurrences of similar interruptions and improve our communications and support response so that customers feel confident in us and the service," she said pointing to Microsoft's Root Cause Analysis to see the most recent improvements.

The report also urged those choosing Azure not to jump in too fast. "Customers who intend to adopt Azure strategically and migrate applications over a period of one year or more (finishing in 2016 or later) can begin to deploy some workloads now, but those with a broad range of immediate enterprise needs may encounter challenges," the report advised.

Microsoft said it has aggressive plans to add new features, and said Gartner even acknowledged as much in the report. And, the spokeswoman's statement added: "Over the past 12 months, we've added more than 500 new features and services to the Azure platform, including robust IaaS and PaaS capabilities as well as offerings that enable consistency across on-prem and the cloud so customers can achieve the hybrid scenarios they demand."

At its Ignite conference last month, Microsoft announced extensive new hybrid cloud computing features coming in the form of the new Azure Stack, which the company believes will give it a further edge over both AWS and Google.

Of course different surveys and customer sets have their own benchmarks and criteria, as I noted last week, when Nasuni's third evaluation of major cloud providers gave preference to Microsoft Azure. Whether or not you give credence to Gartner's Magic Quadrants, it seems to match industry sentiment that AWS remains the dominant public cloud but Azure is a clear No. 2. Both companies would agree this race is far from over.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.